This article throws light upon the five main steps involved in the planning process in an organisation. The steps are: 1. Environment Analysis 2. Determination of Mission and Objectives 3. ‘Developing Strategies’ 4. Developing Programmes or Action Plans 5. Control Mechanism.

Planning Process: Step # 1.

Environment Analysis:

The external environment covers uncontrollable and unpredictable factors such as technology, market (prices, Competition, customers, etc.), socio-economic climate, political conditions and ecological conditions within which our plans will have to operate.

The internal environment covers relatively controllable factors, such as personnel resources, technology, knowledge, finance, facilities, etc., at the disposal of the firm. The study of the environment or situation analysis will reveal the threats to be met and the opportunities to be exploited as well as strengths and weaknesses.

Planning Process: Step # 2.


Determination of Mission and Objectives:

The situation analysis will serve as a background for formulation of our mission and objectives.

A mission provides the central or basic purpose answering a few basic questions:

(1) What is our business?


(2) Who are our customers?

(3) What is our economic and social responsibility? and so on.

The mission or creed statement will ensure purposeful life for our enterprise in the Justness world. It will give firm direction and make our activities meaningful and interesting.

On the basis of situation analysis and our balance sheet of assets and liabilities, we can easily take the first step in actual business planning, viz., the setting of hierarchy of objectives — overall comparable objectives as well as divisional and departmental objectives. Objectives and goals are formulated at each level of management.

Planning Process: Step # 3.


‘Developing Strategies’:

Objectives give us the precise idea regarding our destination, i.e., where we want to go. The real problem is how to find the best way to achieve the stated objectives.

Finding the best way to go there (where we want to be) is called strategy development, Objectives answer the question:

What business is going to be? Strategy answers the question: How best can the business achieve under intelligent competition? Strategy is the magic wand of action to accomplish our objectives; For each functional area of our business we will formulate our strategic i.e., desirable means to achieve stated ends or objectives.

Planning Process: Step # 4.


Developing Programmes or Action Plans:

On the basis of our objectives and strategies, we will now formulate our detailed programmes or time-bound action plans to achieve specific goals or targets.

An action plan has three elements:

(1) The time limit of performance,


(2) The allocation of tasks to personnel in each department,

(3) The time­table or schedule of work to accomplish targets within the stated period.

Planning Process: Step # 5.

Control Mechanism:

Control is the final phase in our planning, process. It is the other half of planning. Control is the extension of the planning process and the two take place together. Control answers the question: How will we know where we are in future? By means of feedback loop it ensure accomplishment of objectives.


Results or performance will be compared with standards. If deviations are noted, corrective actions are taken in time. Thus planning-action-control-re-planning cycle assures the achievement of our goals or objectives.